What are ASICs and How to Choose an ASIC Mining Company?

What are ASICs and How to Choose an ASIC Mining Company?

ASIC is a computer designed specifically for the task of cryptocurrency mining. Each algorithm has specialized ASICs, so it is not possible to leverage an Ethereum miner for Bitcoin or Litecoin, for example.

These ASIC machines have a very large processing capacity, optimized for the calculation of the solution  hash) of the Proof of Work of each cryptocurrency.

The biggest companies producing these ASICs are Canaan, Bitfury, Whatsminer, Bitmain and Ebang.

How to Choose an ASIC Mining Company?

When choosing an ASIC, some technical characteristics should be considered, among which we highlight:

  • Hashrate: orocessing power; the more powerful your ASIC, the greater the chances of finding the solution (hash);
  • Energy consumption: it is useless to have an enormous capacity if energy consumption increases exponentially; newer models tend to be more efficient;
  • Mining algorithm: each cryptocurrency uses a different mining algorithm; therefore it is not possible to use the ASIC for other cryptocurrencies.

The biggest risk when investing in ASIC miners is that they are developed and optimized for a single purpose. Therefore, if the cryptocurrency changes the algorithm, you lose the entire investment.

Also, new, more powerful processors are released every two to three years. Therefore, these machines quickly become obsolete, with low or negative profitability.

What are Mining Pools and What are They for?

Mining is currently very competitive, especially in Bitcoin. For this reason, miners work in pools (cooperatives) to optimize their hashrate, the processing capacity.

In short, the miners in this pool share the labor, but they also share the reward. This strategy allows small and medium miners to have a more predictable remuneration.

In fact, there are large miners that also participate in these cooperatives, either because of the optimization of work or the greater predictability of revenue.

Either way, you’ll need a wallet to store your cryptocurrencies.

Peter Baker
About Author

Peter Baker

Peter Baker is a veteran cryptocurrency broker who has accumulated more than ten years of experience within the industry. He is widely recognized for his analytical trading approach and his capacity to predict market shifts in the digital asset landscape. Mr. Baker is dedicated to keeping up with the latest technological advancements in order to offer his clients expert guidance and recommendations.

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